LEGRAND / 2018 Registration document

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

GROUP OVERVIEW LEGRAND AND ITS BUSINESS

Presence in new economies New economies (Latin America, Central America, Eastern Europe, Turkey, Asia excluding South Korea, Pacific excluding Australia, Africa and the Middle East) offer long term growth potential. An eighth of the world’s population does not yet have access to electricity, and a middle-class boom is expected in many countries – for instance, according to the OECD, Asia will have around 3 billion middle-class citizens by 2030, five times more than in Europe – driving demand especially for high value-added products. As a result, Legrand believes that in the long term, its market offers attractive growth potential as electricity generation and distribution infrastructures gradually develop. The Group sells its products in nearly 130 new economies and has a commercial and/or industrial presence in over half of them. This expansion is evenly spread, with new economies representing almost 29% of the Group’s sales at the end of 2018, the most significant country being India representing more than 5% of total Group sales. 2.1.1.2.2 New technologies Legrand is convinced that new technologies, in particular digital ones, significantly increase the value-in-use of electrical and digital building infrastructure products for both individual users and professionals. The Group has therefore decided to step up its investments in new technologies, deploying a range of initiatives that include: W the Eliot program, launched in July 2015, aimed at speeding up deployment of the Internet of Things in the Group’s offering. Eliot-related activities generated sales of €635 million in 2018, more than 10% of the Group total sales. Between 2014 and 2018, sales of connected products grew in total at an average annual rate of 28%. Over the same period, the program was rolled out across numerous countries and the number of connected product families doubled to over 40 (1) at the end of 2018. As a result, Legrand achieved the Eliot program’s 2020 targets (2) as early as in 2018. Eliot moreover accelerated in 2018 with the acquisition of Netatmo, France’s leading player in connected objects for smart homes, with which Legrand had already successfully co-developed several smart-home management solutions, such as Céliane with Netatmo and Living Now with Netatmo, which were very well received in the market. With sales of around €51 million in 2018, up close to 37% compared with 2017, Netatmo is enhancing Legrand’s offering with new product categories and

increasing the Group’s development capabilities with the know- how of 130 engineers specializing in artificial intelligence, user experience and software product integration; W R&D investments that are increasingly focused on new technologies, for example with the number of R&D staff assigned to software multiplied by more than four between 2010 and 2018; W the signing of collaborative agreements, strategic partnerships and many technological alliances, particularly as part of the “Works with Legrand” program. Legrand has thus formed numerous partnerships, including with Apple, Google, Microsoft and Alexa TM , with which the Group has developed the first connected switch with built-in voice assistant. The program also includes startups like CareOS, to integrate Legrand solutions into an innovative smart mirror, and Lumenetix in the United States; W the development of offerings addressing new usages, such as improving workspace management with the development of smart detectors in partnership with Microsoft Office 365, integrating artificial intelligence into connected face-recognition door entry systems in China, and developing connected emergency lighting allowing remote surveillance and optimized maintenance; and W involvement in various technology alliances, such as Open Connectivity Foundation, ZigBee Alliance, BACnet International, LoRa Alliance, Thread Group and the Wifi Alliance, to ensure the interoperability of its range with those of other players and to take part in defining the standards of tomorrow. Legrand is also supplementing its offering in areas that fit very well with its long-standing activities, that have business models very similar to its own and that show promising prospects, particularly in digital infrastructure. In the last four years, for example, along with Netatmo in connected products, Legrand has: W acquired Milestone, a leading player of the Audio-Video (AV) infrastructure and power in the United States, and Luxul Wireless, a specialist in Audio-Video infrastructures for residential buildings and small and mid-sized commercial buildings, in the Audio- Video field; W acquired Server Technology Inc. and Shenzhen Clever Electronic (that are respectively the frontrunner in North-America and the Chinese leader in smart PDUs (3) ), Raritan (which also has solid positions in North America in the smart PDU (3) segment but also specializes in KVM (4) switches), as well as Fluxpower, Primetech and Gemnet (specializing in UPS (5) systems) and AFCO Systems Group (US specialist in Voice-Data-Image cabinets), and entered into a joint venture with Modulan (German specialist in custom cabinets) in the datacenter field;

(1) Includes Netatmo, not consolidated in 2018 sales. (2) As a reminder, in 2015 Legrand set itself targets that included doubling the number of connected product families – from 20 in 2014 to 40 in 2020 – and achieving double-digit average annual total growth in sales for connected products between 2014 and 2020. (3) PDU: Power Distribution Unit. (4) KVM: Keyboard, Video and Mouse. (5) Uninterruptible Power Supply.

32

LEGRAND

REGISTRATION DOCUMENT 2018